KB CEO A. Juan yesterday reiterated the bank’s financial targets for 2004: an ROE of 25% and a cost/income ratio of 50-55%, Reuters reported. KB, which is scheduled to release its unconsolidated IAS 2002 figures on February 28 (10 a.m. CET), reportedly did not fulfil its growth targets for corporate lending last year, which will affect its operating performance (we estimate a more than 3% decrease in operating revenues at KB in 2002). On the other hand, strong private consumption and retail lending is expected to drive KB's performance in 2003.
Mr. Juan also indicated that KB's 2002-03 net profit would be boosted by a massive release of provisions for non-performing loans.
The news is overall expected, but the reiterated ambitious targets for 2004 (we estimate a 2004 ROE of 22%) might be considered as encouraging news by some investors.
Jan Hajek